Moody's Investors Service lowered the credit ratings of 15 major banks Thursday, including Bank of America, JPMorgan Chase and Goldman Sachs, saying their long-term prospects for profitability and growth are shrinking.
The ratings agency said it was especially concerned about banks with
significant financial markets businesses because those markets have
become so volatile. Some of the largest European banks were also
downgraded, including Barclays, Deutsche Bank and HSBC.
These banks were vulnerable to "outsized losses," Moody's global
banking managing director Greg Bauer said in a statement. These behemoth
banks are all major players in the global stock and bond markets, which
have become extremely volatile. However, Bauer pointed out that some of
the banks, like JPMorgan Chase and HSBC, have reliable buffers in more
stable businesses which could act as "shock absorbers" during a crisis.